Following the industry response to the autumn budget, NFU president Tom Bradshaw met with the Defra Secretary of State and Treasury officials to stress the impact changes to inheritance tax will have on British food and farming.
Mr Bradshaw outlined what reductions in agricultural property relief and business property relief would mean for family farms, and the potential knock-on impact on homegrown food production.
He said: “I’ve spoken to a huge number of our members in the past few days and heard some really upsetting accounts of what this tax would do to family farms.
“I’ve heard about distressed elderly parents who are having to apologise to their children in tears for something that isn’t their fault, telling them they’re sorry because they feel they’re now a burden on the family. I’ve heard from families who can’t see any way they can plan for a future which doesn’t result in losing their business. Men and women who’ve spent years building up farm businesses now wondering what’s the point in carrying on when it’s going to be ripped apart.
“These are the working people of the countryside, and I made it clear to Defra and the Treasury today that there has been a clear miscalculation of the impact this will have on them. The Treasury has got its figures wrong1. This policy won’t protect family farms, it will do the opposite.
“Treasury officials have assumed that all previous Agricultural Property Relief (APR) claims are working farms, which is not the case. Nor did these claims include those eligible for Business Property Relief (BPR). Far from protecting smaller family farms, which is what ministers say they’re doing, they’re actually protecting private houses in the country with a few acres let out for grazing whilst disproportionately hammering actual, food-producing farms which are, on paper, much more valuable. Even Defra’s own figures show this, which is why they’re so different to the Treasury data this policy is based on.
“With Defra data showing two thirds of farms could be affected, it was good to hear that the Treasury would look at the discrepancy in figures.
“I also asked if there were plans for an impact assessment of this policy on homegrown food production. Because if farms are being broken up and sold, British food will be hit. There is a very real threat to our long-term food security because there is no incentive to invest for the future.
“With businesses already running on unsustainably tight margins – mass flooding meant that many haven’t turned a profit this year – compounded with further costs from National Insurance and National Living Wage increases, farming families have nothing left to give.
“At last year’s NFU Conference, we heard from Sir Keir Starmer that ‘Losing a farm is not like losing any other business, it can’t come back’. He was absolutely right. It can’t. And neither can its ability to produce food for the nation.
“That’s why the only sensible course of action is for the Treasury to reverse this decision.
“The pressure is building. Defra and the Treasury are aware that on 19 November, NFU members will be making their way to Westminster to take part in our mass lobby of MPs. We will be looking them in the eye and asking if they support this family farm tax, or if they will do the right thing for their farming constituents and support our call for it to be reversed.”
Government responds
Following the meeting, the government remained steadfast, with a spokesperson saying: “The government’s commitment to our farmers remains steadfast. It’s why we have committed £5 billion to the farming budget over two years – more money than ever for sustainable food production.
“We understand concerns about changes to Agricultural Property Relief and the Defra Secretary of State and Exchequer Secretary to the Treasury met with NFU President Tom Bradshaw today.
“Ministers made clear that the vast majority of those claiming relief will not be affected by these changes. They will be able to pass the family farm down to their children just as previous generations have always done.
“This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on. We remain committed to working with the NFU and listening to farmers.”